What impact will the new round of Palestinian Israeli conflict have on the shipping market? The following text will analyze from various sectors.

(1) Collective and bulk transportation

If the Israeli Palestinian conflict expands beyond its borders, it will pose risks to the two key shipping channels, the Suez Canal and the Strait of Hormuz. The Suez Canal is a crucial waterway for all types of merchant ships, and the Strait of Hormuz is crucial for oil and gas transportation.
If the canal is closed due to regional conflicts, ships will have to detour around Africa, thereby extending the route, which is beneficial for absorbing available capacity and increasing freight costs.
The volume of the consolidation market in the Israeli Palestinian region itself is not large. Shipping consulting firm Linerlitica stated on Monday that the container throughput of major local ports Ashdod and Haifa accounts for only 0.4% of the global total. ZIM is the tenth largest shipping company in the world, headquartered in Haifa. The company confirmed on Wednesday that its Israel route services may be interrupted and a war risk surcharge will be charged.
Similarly, the impact of the Israeli Palestinian conflict on the bulk transportation sector is limited, and the biggest impact may be changes in fuel costs caused by fluctuations in oil prices.

(2) Crude oil transportation

The Strait of Hormuz is different from the Suez Canal in that it is an unavoidable waterway, and a large amount of oil and natural gas relies on its exports. If the Strait of Hormuz is closed, it will lead to a decrease in transportation volume, which is not conducive to the demand for tons per nautical mile.
Ship brokerage firm BRS said on Monday that the possible changes in the near future are a decrease in Iran's crude oil exports and an increase in Saudi Arabia's production, which will have a positive impact on the spot rates of mainstream crude oil tankers.
LPG transportation
VLGC freight rates may increase. The LPG transported by VLGC is the raw material for steam cracking. The rise in oil prices after the Middle East war will push up the price of naphtha and reduce its competitiveness, increasing Asia's demand for imported LPG and boosting VLGC demand.
Ted Young, Chief Financial Officer of Dorian LPG, stated that,
If geopolitical conflicts continue to push up oil prices, as long as they are not high enough to suppress demand, it will not have a negative impact on our business.
-Finished oil transportation-
Robert Bugbee, President of Scorpio Tankers, pointed out that the current freight rates for finished oil tankers have exceeded normal levels, and inventory is low. The geopolitical crisis will further push up freight rates in winter.
After the COVID-19 epidemic, the consumption of gasoline, aviation fuel and other refined oil products has increased. Therefore, it is easy for energy shortages to occur globally.
-LNG transportation-
At the same time, major LNG importing countries are increasing their Floating Storage Regasification Units (FSRUs) to increase supply diversity, and the war in the Middle East should exacerbate this trend.
Art Regan, CEO of FSRU shipowner Energas Infrastructure, stated that everyone is reassessing the energy matrix for the next 10-20 years, which is not related to energy transformation, but rather to energy security.

Source: China Ocean Shipping E-Journal